What is the Difference Between Medical Malpractice and Professional Indemnity?

Although both medical malpractice (also known as medical indemnity) and professional indemnity are types of professional liability cover, they respond quite differently to each other. They’re often confused because both protect against negligence or errors made by an individual or entity in the course of their professional work.

Both can operate on either a claims-made or occurrence basis. A claims-made policy covers claims that are made while the policy is active, while an occurrence policy covers incidents that happened during the time the policy was held — even if the claim is made later.

Medical Malpractice Insurance

Medical malpractice insurance is specifically designed for healthcare professionals. It protects individuals or organisations against claims of negligence, errors, or omissions that have caused injury or harm to a patient.

For example, imagine a surgeon who fails to inform a patient about a possible complication before a procedure. If that complication occurs and results in significant pain or lasting health issues, the patient could make a claim. In cases like this, failing to properly inform the patient during the consent process can be very difficult to defend.

The outcome could involve regulatory action against the professional or financial compensation for the claimant — and in some cases, damages can reach millions of pounds, especially if the harm causes life-long consequences.

Professional Indemnity Insurance

Professional indemnity insurance, on the other hand, applies to a wide range of professions, not just healthcare. It also covers negligence, errors, or omissions, but here the loss is typically financial, rather than physical harm.

Take the example of an insurance broker. Suppose a broker fails to pass on all the relevant client information to an insurer when setting up a policy — even though the client provided it. If the insurer later declines a claim due to this missing information, the client could take legal action against the broker.

In this scenario, the broker’s professional indemnity insurance would step in, covering the resulting claim because the loss was financial rather than physical.

In summary, while both types of cover deal with professional mistakes, the key difference lies in the type of harm caused — medical malpractice deals with injury or harm to a person, while professional indemnity covers financial loss.

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